The quantity demanded of Pepsi has decreased. The best explanation for this is that ?
Correct answer: D. The price of Pepsi increased
- A. Pepsi's advertising is not as effective as in the past .
- B. The price of Coca Cola has increased,
- C. Pepsi consumers had an increase in income.
- D. The price of Pepsi increased
Explanation
A decrease in quantity demanded means movement along Pepsi's existing demand curve, which is caused by an increase in Pepsi's own price. The other factors would generally shift the demand curve rather than directly change quantity demanded.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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